Robert J. Fedor, Esq., L.L.C.
Cleveland Office: 440-250-9709 Chicago Office: 312-836-9096 Toll Free: 800-579-0997
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Tax Law Blog

Are non-citizens exempt from paying U.S. taxes?

The Internal Revenue Service is the federal agency tasked with both establishing and enforcing U.S. tax laws and collecting tax-related payments. While most other countries collect taxes from citizens, the U.S. is renowned as having some of the strictest and widely enforced tax laws of any country.

We've previously written about how U.S. born citizens living abroad are being impacted by the Foreign Account Tax Compliance Act, however, there are cases in which even non U.S. citizens are required to pay Uncle Sam.

What's the difference between an employee and independent contractor?

The goal of many small business owners is to grow their business and business capabilities. In many cases, business owners who are successful in achieving this goal must hire individuals to assist with a variety of business-related matters. Upon hiring someone, business owners must take steps to correctly classify a worker as either an employee or independent contractor.

For a small business owner, designating a worker as an employee or independent contractor has significant and varying tax obligations and implications. While the IRS doesn't offer any hard and fast rules about how to classify an employee, it does provide basic guidelines that must be considered and taken into account by an employer.

Addressing compliance issues related to offshore financial accounts

The Internal Revenue Service combats the circumvention of United States law by requiring U.S. citizens and residents with money in foreign accounts to report those accounts each year by completing the Report of Foreign Bank and Financial Accounts, or FBAR. Under the Bank Secrecy Act, foreign trusts, mutual funds, brokerage accounts and bank accounts, along with any dividends, interest, gains or losses associated with those accounts, must be reported.

There is nothing illegal about a U.S. citizen or resident simply having a foreign bank account. In recent years, however, the U.S. Department of Justice and the IRS have stepped up efforts to hold individuals, corporations and trusts civilly and criminally accountable for not disclosing foreign accounts.

Yes, the IRS can and will put a lien on your property if you don't pay back taxes

In a recent post we discussed an IRS-issued document called a Notice of Underreported Income. In this post we'll discuss another, more serious, type of notice an individual who has failed to respond to previous IRS inquiries may receive, a Notice of Federal Tax Lien.

This notice is to effectively inform a taxpayer that the IRS has assessed his or her liability and previous efforts to recover unpaid tax debt have been ignored or refuted.

Efforts of IRS to pursue tax crimes hampered by budget cuts

Washington politics are at the center of major budgetary cuts at the Internal Revenue Service that may severely hamper the agency's ability to investigate and prosecute criminal tax cases. Like most federal offices, the IRS relies upon highly skilled professionals when seeking to bring criminal charges against individuals and corporations related to tax crimes like tax evasion, tax fraud and money laundering.

In recent years, the IRS has been the subject of much debate and disdain among republican and tea party members after it was revealed that agency officials subjected conservative groups that were applying for tax-exempt status to excess scrutiny. The backlash against the IRS has been fierce with the "republican-controlled U.S. House of Representatives voting to cut the IRS' enforcement budget in 2015 by over $1 billion."

When dealing with independent tax preparers, taxpayers should be wary

Each tax season, millions of Americans rely upon tax professionals to prepare and file tax-related documents. While many tax preparers are employed by reputable and well-known companies, many others are independent and self-employed and, therefore, subject to little to no oversight.

The clients of one such independent tax preparer recently learned that the 49-year-old man pleaded guilty to IRS criminal charges related to preparing and filing false tax returns. The man, Sharif Mahfouz, targeted U.S. clients who were living abroad. IRS investigators determined that from 2007 through 2012, Mahfouz routinely prepared false tax returns on behalf of clients.

What should I do if I receive a Notice of Underreported Income from the IRS?

We've previously discussed how complex and confusing tax laws and regulations can be. As a result, many people who attempt to complete and file their own tax documents make mistakes. Tax errors related to earned income totals are common and when the IRS catches a discrepancy in reported income, and you can be assured they will, a taxpayer receives what is known as a Notice of Underreported Income.

Tax woes of the rich and famous

When it comes to some celebrities, the phrase more money, more problems seems to definitely apply. The IRS doesn't care who you are or how famous you are. If the federal government believes you owe it money, it will take action to recoup the amount in dispute, impose penalties and, if necessary, take legal action.

Actress Vanessa Williams is one of the most recent celebrities to be targeted by the IRS. Earlier this month, the IRS filed a tax lien against Williams who reportedly owes nearly $370,000 in back taxes. The 51-year-old actress first garnered national attention in 1983 when she became the first African American Miss America, a title she was subsequently forced to relinquish. Since that time, she's made millions acting in several successful movies and television shows.

Business owners: beware the Trust Fund Recovery Penalty

We've previously discussed some of the red flag actions, or inactions, that are likely to get the IRS's attention. For small business owners, tax obligations are not only financially burdensome, but also confusing leading some to make costly tax mistakes.

In IRS criminal tax cases, the burden of proof is on the government

We talk a lot in this blog about the complexities of U.S. tax codes and how confusion surrounding their meaning and interpretation can spell trouble for a taxpayer. There are also, however, other cases where individuals intentionally sets out to deceive or profit from the IRS. In these types of cases, the burden of proof is on the government to provide evidence that an individual knowingly and intentionally took action to deceive the IRS and personally profit.

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Robert J. Fedor, Esq., L.L.C.
23550 Center Ridge Road, Suite 107
Westlake, OH 44145

Phone: 440-250-9709
Toll Free: 800-579-0997
Fax: 440-250-9714
Westlake Law Office Map

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Robert J. Fedor, Esq., L.L.C.
542 S. Dearborn St., Suite 660
Chicago, IL 60605
Phone: 312-836-9096
Toll Free: 800-579-0997
Fax: 312-697-1384
Chicago Law Office Map